UK:
Bank Recovery And Resolution Directive Contractual Bail-In
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The Bank Recovery and Resolution Directive equips regulatory
authorities in Europe with tools designed to protect the stability
of the financial system and financial markets in the European
Economic Area in the event of bank failure or the failure of a
systemically important investment firm. The directive introduces
bail-in measures whereby investors and certain creditors of failing
institutions are "bailed in" (i.e., the liabilities of
the institution are written down or converted to equity) before
there can be any resort to public funds.
In the case of liabilities which are governed by non-EU laws,
the directive mandates that European institutions impose on their
counterparties contractual provisions which will facilitate the
bail-in of those counterparties in the event the institution fails,
although under the governing law of the relevant contract, such
action may not have been open to the European regulator.
This White Paper examines the consequences of
contractual bail-in for counterparties to, and creditors and
investors in, relevant European banks and other institutions.
View the full White Paper
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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